CALGARY, March 2 /CNW/ - Guillermo Salazar S., President and CEO of Copper Fox Metals Inc. (TSX Venture: CUU) announces that the Company reported income for the fourth quarter of $1,890,230, ($0.02 income per share) and a loss of $736,714, ($0.01 loss per share) for the year ended October 31, 2008. The income earned in the fourth quarter results from the recognition of a tax benefit that had not been previously recorded. In addition, the Company announced in a separate news release dated February 27, 2009 that it has entered into a binding letter of intent with Lions Gate Metals Inc. whereby the two companies plan to form a business accommodation. Mr. Salazar stated "I am delighted that Copper Fox has been able to enter into the letter of intent with Lions Gate Metals. This transaction will allow us to advance and unlock the inherent value of our core asset, the world class Schaft Creek deposit, solidify the Company's financial position, and leverage the combined assets base to demonstrate tremendous benefit to the shareholders of Copper Fox". Copies of the financial statements and notes and related management discussion and analysis may be obtained on SEDAR at www.sedar.com, our Company web site at www.copperfoxmetals.com or by contacting the Company directly. All amounts are in Canadian dollars unless otherwise stated.
Highlights and Significant Items
Copper Fox was very active during its 2008 fiscal year including $15.5 million of expenditures on its mineral property at Schaft Creek and through raising $11.8 million of new capital through the issuance of new shares and the exercise of stock options.
With the accumulated data obtained through its drilling programs at the Schaft Creek site, the Company released a preliminary feasibility study in September detailing the economic merits of this mineral deposit. The analysis supports the Company's decision to continue to plan for a 100,000 tonne per day producing mine operation. Given the uncertainty associated with the global decline in metal prices the Company will await further stability in the financial markets to choose an appropriate time to complete its feasibility study.
On February 27, 2009, the Company announced that they had entered into a binding letter of intent ("LOI") to merge with Lions Gate Metals Inc. The proposal transaction is subject to Shareholders' approval, due diligence by both parties on each other, the TSX Venture Exchange approval and obtaining certain settlement agreements with the Company's creditors. Under this plan of arrangement, Lions Gate Metals Inc. will acquire all of the issued and outstanding common shares of the Company. The LOI contemplates that each Copper Fox shareholder will receive 0.094 common shares of Lions Gate for every one common share of Copper Fox. For every one common share of Lions Gate the shareholders of Copper Fox receive, they will also receive 0.5 Lions Gate warrants. The holder of one Lions Gate warrant will be entitled to purchase one additional common share of Lions Gate in consideration of payment of $2.00 to Lions Gate. The Lions Gate warrants will be exercisable for a period of 5 years. In addition, all outstanding convertible securities of Copper Fox will be exchange for comparable convertible securities of Lions Gate in an amount and at exercise prices adjusted in accordance with the same exchange ratio.
This transaction provides for Lions Gate to have exclusive authority to enter into settlement arrangements by March 27, 2009 with the creditors of Copper Fox to discharge the debt of approximately $3,575,000 at February 26, 2009.
Selected Financial Information ------------------------------------------------------------------------- Net loss per share - Net Loss basic and diluted ------------------------------------------------------------------------- 2008 ---- Fourth Quarter $ 1,890,230 $ 0.02 Third Quarter $ (1,307,512) $ (0.01) Second Quarter $ (720,878) $ (0.01) First Quarter $ (598,554) $ (0.01) ------------------------------------------------------------------------- 2007 ---- Fourth Quarter $ (1,215,394) $ (0.02) Third Quarter $ (2,255,109) $ (0.01) Second Quarter $ (540,473) $ (0.03) First Quarter $ (407,802) $ (0.01) -------------------------------------------------------------------------
During the fourth quarter the Company's working capital position decreased from $5,319,046 to a working capital deficiency of $2,059,026 as at October 31, 2008. This was as a result of the Company expenditures at the Schaft Creek mineral property, the completion of the Company's preliminary feasibility study released in September and general and administrative expenses related to its Calgary and Vancouver offices.
The Company's ability to continue operations is dependent on obtaining required funds to repay its existing creditors, maintain its interest in the property and achieve success in developing commercial mineral interests. Given the Company's current inability to raise additional capital, the Company may need to avail itself of creditor protection to preserve its property value.
The Company is dependent upon the continued financial support of its creditors in order to carry out its business plan. Additional sources of financing will also be necessary for the Company to continue exploration and development of its property. Management is seeking equity financing for the Company and although management has been successful in the past, there is no assurance that these initiatives will be successful in the future.
As previously announced in a separate news release dated February 27, 2009, the Company has entered into a plan of arrangement to merge its operations with Lions Gate Metals Inc. This merger among other anticipated synergies provides a mechanism for the settlement of outstanding creditor debts of approximately $3,575,000 at February 27, 2009.
Copper Fox is a Junior Resource Mining Company listed on the TSX-Venture Exchange (CUU). The company is involved in the exploration and development of a world-class copper/gold porphyry mineral deposit located in north western B.C. at Schaft Creek. Under the terms of an option agreement negotiated with Teck Cominco Limited, Copper Fox can acquire up to a 94.3% aggregate (direct and indirect) interest in the Schaft Creek mineral resource.
ON BEHALF OF THE BOARD OF DIRECTORS Guillermo Salazar S., P. Geol. President and CEO
The TSX Venture exchange has not reviewed the contents of this news release and accepts no responsibility for the adequacy or the accuracy thereof. This news release includes "forward-looking information" within the meaning of the Canadian securities laws. Statements, other than statements of historical fact, may constitute forward-looking information and include, without limitation: anticipated timing and content of upcoming work programs, geological interpretations, receipt of property titles, and potential mineral recovery processes; anticipated dates for receipt of permits, approvals and other milestones; anticipated results of drilling programs, feasibility studies and other analyses; anticipated availability and terms of future financing; future production, operating and capital costs; and operating or financial performance. Information concerning mineral reserve and resource estimates also may be deemed to be forward-looking information in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined. For any forward looking information given, management has assumed that the assay results it has received are reliable, and has applied geological interpretation methodologies which are consistent with industry standards. Forward-looking information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Important factors that could cause actual results to differ materially from management's expectations include: fluctuations in commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for co-operation of government agencies in the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the company's other filings with Canadian securities regulatory authorities at www.sedar.com. The forward-looking information in this news release is based on management's current expectations and Copper Fox assumes no obligations to update such information to reflect later events or developments, except as required by law. Additional information, about the risks and uncertainties of the Company's business is provided in its disclosure materials, including its most recent annual and quarterly filings, filed with the securities regulatory authorities in Canada available at www.sedar.com. The forward-looking information in this news release is based on management's current expectations and Copper Fox assumes no obligations to update such information to reflect later events or developments, except as required by law. Additional information, about the risks and uncertainties of the Company's business is provided in its disclosure materials, including its most recent annual and quarterly filings, filed with the securities regulatory authorities in Canada available at www.sedar.com.